Venture Corporation, a leading global provider of Technology products and solutions, posted total return of 36.4% year-to-date. Silverlake Axis, a leading provider of digital economy solutions and services, registered total return of 2.6% year-to-date. UMS Holdings, a leading manufacturer of high precision front-end semiconductor components, had a total return of 106.6% year-to-date.
Regular Shares Saving Plans (RSS Plans) provide an alternative means for investors to build gradual STI exposure, make use of dollar cost averaging with performance measured by return rates. From 30 June 2014 to 29 May 2017, the indicative return rate of an RSS Plan on a STI ETF came to 6.3% p.a. RSS plans utilise dollar cost averaging. Over the three year period, dollar cost averaging on the STI ETF meant that one third more units were bought at market lows in January 2016, compared to market highs in April 2015.
Global semiconductor industry is in a cyclical up-cycle, driven by Internet of Things (IoT) and mobile devices. Strong growth in electronics and precision engineering clusters likely to provide support to Singapore’s economy in 2017. The 12 semiconductor SGX-listed stocks, riding on the strong near-term momentum in the industry, generated an average total return of 65.7% in the year-to-date, bringing their one-year average total return to 115.6%. Singapore’s three largest semiconductor stocks - UMS Holdings, Micro-Mechanics & AEM Holdings are in net-cash positions, which ensures dividend payouts to their shareholders.
The STI’s five Real Estate Developer & Operator stocks are Hongkong Land Holdings, CapitaLand, Global Logistic Properties, City Developments and UOL Group. Together the five stocks have averaged a 23% total return in the 2017 YTD. The majority of these returns occurred earlier in the year, amidst the global rotation from Emerging Markets to Developing Markets, and the Singapore Government announcing the easing of property market cooling measures on 10 March.
Emerging Technologies seen driving global Electronics Manufacturing Services (EMS) industry’s 6.2% CAGR from 2015-2020. In recent years, SGX-listed EMS providers are diversifying their businesses away from traditional Technologies into emerging Technologies. Focus on emerging Technologies (e.g. Medical Technology, Life Sciences, Automotive Electronics) are now bearing fruit.
The STI has generated a 14.5% YTD dividend inclusive return, with Yangzijiang Shipbuilding Holdings (which joined the STI in September 2015) the strongest of the 30 STI constituents. The strongest STI Sector in the YTD has been Real Estate Management & Development – with Global Logistic Properties, City Developments, CapitaLand, UOL Group and Hongkong Land Holdings averaging 24.5% total returns.
Singapore’s Electronics cluster (27.4% of total manufacturing activity) demonstrates strong momentum with its 13th consecutive month of YoY output growth. SGX’s IT Sector is an outperformer in the YTD with total returns of 33.3%, above the STI’s +11.1% and the MSCI Asia ex-Japan IT Index’s +18.4%. Strong earnings outlook likely the key driver of IT Sector’s outperformance. Consensus expects 10 largest IT stocks* to grow earnings by 20% in 2017.
The MSCI Singapore Index (“SiMSCI Index”) ended yesterday at 358.3, which is a 18 month high and a 27% recovery from its February 2016 low. The SIMSCI Index has delivered a 14% YTD total return and been amongst the leading performers amongst key Asian indices. Half of the SiMSCI Index constituents have recently reported 1Q17 earnings. In addition, a slew of dividend distributions last week have seen the discount of the May SiMSCI Futures to the underlying SiMSCI Index narrow by 2.0 points.
SGX lists four Indian equity ETFs, three of which track the MSCI India Index, while the fourth tracks the Nifty 50 Index. They were among the top performing ETFs in the year-to-date, averaging a return of 16.0%. In the year thus far, Indian equity fund inflows have reached US$6.3 billion, second only to Taiwan in Asia. In terms of global fund flows, India was ranked 11th, above key Asian economies like South Korea, Malaysia and Indonesia, which are also experiencing net inflows in the year-to-date.
Information Technology (IT) was the best performing of Singapore’s Sectors in the 2017 YTD. The IT Sector generated a 4.9% capitalisation weighted total return in April, taking YTD gains to 33.3%. April was the third consecutive month the IT Sector was the best performing. The largest stock of Singapore IT Sector, Venture Corp reported 1Q17 results on Friday, with net profit up 36% YOY to S$48.6 million. Among the 10 largest stocks of Singapore’s IT Sector, Elec & Eltek International Co was the best YTD performer.
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